Released August 28, 2023 | SUGAR LAND
en
Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--With strong wording like, "These last-minute changes are unlawful several times over," and "they (the changes) are a wholly arbitrary and capricious departure from BOEM's (Bureau of Ocean Energy Management) prior position," three entities have filed suit in federal court for the Western District of Louisiana against the Biden administration over acreage restrictions in an upcoming Gulf of Mexico oil and gas lease.
Saying that the exclusions in the lease sale "will cause enormous distortions to Lease Sale 261 if they remain in," the plaintiffs request that the court order the challenged provisions removed "before the sale proceeds" (emphasis original).
The American Petroleum Institute (API), the State of Louisiana and oil giant Chevron Corporation (NYSE:CVX) (San Ramon, California), the latter of which has significant interests in the Gulf of Mexico, filed the suit in light of last week's decision by the Interior Department's BOEM to remove approximately 6 million acres of area previously expected to be offered in Lease Sale 261 due to concerns about the endangered Rice's whale. BOEM has scheduled that auction for September 27.
Only identified in 2021, the Rice's whale population is believed to be less than 100, according to National Oceanic and Atmospheric Administration (NOAA) Fisheries estimates. The whale has been seen primarily in the northeastern Gulf of Mexico, along the continental shelf break between 100 and about 400 meters depth, NOAA Fisheries reports.
In the BOEM's record of decision released Wednesday, the agency's Principal Deputy Assistant Secretary, Land and Minerals Management Laura Daniel-Davis (who is among those specifically named in the lawsuit, along with Secretary of the Interior Deb Holland and BOEM as a whole), listed 11 unleased areas in the originally proposed area that will be removed. Those areas total about 6 million acres. Overall, the lease sale will offer approximately 12,395 blocks on about 67 million acres on the U.S. Outer Continental Shelf in the western, central and eastern planning areas in the Gulf of Mexico.
The deletion of the 6 million acres came in response to federal agencies' agreement with environmental groups over a 2020 lawsuit contending that the government had failed to sufficiently protect whales. The suit is now paused.
The API was quick to respond to the limitations. API Vice President of Upstream Policy Holly Hopkins said in a statement, "While the Department of the Interior announced a much-needed offshore lease sale today, the Biden administration continues to throw up roadblock after roadblock to American energy production, prioritizing their campaign promise to stop American oil and natural gas development in federal waters over their duty to meet Americans' energy needs." She added, "This action defies Congress's mandate in the Inflation Reduction Act, jeopardizes U.S. energy security, and violates the Biden administration's energy obligations to the American people."
A Chevron statement supplied to Industrial Info said, "Chevron is challenging the mandatory vessel restrictions in Gulf of Mexico Lease Sale 261, which is required by the Inflation Reduction Act of 2022. These restrictions, which only target vessels servicing the oil and gas industry, negatively impact our ability to produce some of the lowest carbon intensity barrels in the world and could disrupt much-needed domestic energy supply. Applying restrictions to a fraction of vessels in the area based on limited data to justify it raises questions about whether the restrictions offer any real benefit to the species. In over 85 years of operating in the Gulf, we are not aware of any Rice's whale strikes involving oil and gas vessels.
Chevron is committed to protecting marine life in the Gulf of Mexico and around the world. The unprecedented lapse in the offshore leasing program, the lack of clarity on future lease sales, and these vessel restrictions only serve to threaten Gulf Coast economies and America's energy independence and security."
U.S. Senator Joe Manchin (D-West Virginia), who was instrumental in adding energy security provisions to the IRA, also weighed in. "This Administration continues to kowtow to radical environmentalists at the expense of American energy security and costs to American families. Let me be clear, the exclusion of more than 6 million productive acres from the upcoming offshore oil and gas lease sale in the Gulf of Mexico based on a settlement reached in the name of protecting Rice's whale while conveniently only targeting oil and gas is yet another example of this Administration's intentional undermining of the strong energy security provisions in the Inflation Reduction Act."
And Dan Kish, senior fellow for the Institute for Energy Research, called Biden's offshore leasing track record the "worst since World War II ended," adding, "Everybody knows his record on whales is atrocious, as he continues to push offshore wind as the whales wash up on the beaches of the East Coast. Using whales as an excuse to limit leasing in the Gulf of Mexico is rightly being challenged."
The judge likely to hear the case, Terry Doughty, was appointed to his post in 2017 by then-president Donald Trump.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
Saying that the exclusions in the lease sale "will cause enormous distortions to Lease Sale 261 if they remain in," the plaintiffs request that the court order the challenged provisions removed "before the sale proceeds" (emphasis original).
The American Petroleum Institute (API), the State of Louisiana and oil giant Chevron Corporation (NYSE:CVX) (San Ramon, California), the latter of which has significant interests in the Gulf of Mexico, filed the suit in light of last week's decision by the Interior Department's BOEM to remove approximately 6 million acres of area previously expected to be offered in Lease Sale 261 due to concerns about the endangered Rice's whale. BOEM has scheduled that auction for September 27.
Only identified in 2021, the Rice's whale population is believed to be less than 100, according to National Oceanic and Atmospheric Administration (NOAA) Fisheries estimates. The whale has been seen primarily in the northeastern Gulf of Mexico, along the continental shelf break between 100 and about 400 meters depth, NOAA Fisheries reports.
In the BOEM's record of decision released Wednesday, the agency's Principal Deputy Assistant Secretary, Land and Minerals Management Laura Daniel-Davis (who is among those specifically named in the lawsuit, along with Secretary of the Interior Deb Holland and BOEM as a whole), listed 11 unleased areas in the originally proposed area that will be removed. Those areas total about 6 million acres. Overall, the lease sale will offer approximately 12,395 blocks on about 67 million acres on the U.S. Outer Continental Shelf in the western, central and eastern planning areas in the Gulf of Mexico.
The deletion of the 6 million acres came in response to federal agencies' agreement with environmental groups over a 2020 lawsuit contending that the government had failed to sufficiently protect whales. The suit is now paused.
The API was quick to respond to the limitations. API Vice President of Upstream Policy Holly Hopkins said in a statement, "While the Department of the Interior announced a much-needed offshore lease sale today, the Biden administration continues to throw up roadblock after roadblock to American energy production, prioritizing their campaign promise to stop American oil and natural gas development in federal waters over their duty to meet Americans' energy needs." She added, "This action defies Congress's mandate in the Inflation Reduction Act, jeopardizes U.S. energy security, and violates the Biden administration's energy obligations to the American people."
A Chevron statement supplied to Industrial Info said, "Chevron is challenging the mandatory vessel restrictions in Gulf of Mexico Lease Sale 261, which is required by the Inflation Reduction Act of 2022. These restrictions, which only target vessels servicing the oil and gas industry, negatively impact our ability to produce some of the lowest carbon intensity barrels in the world and could disrupt much-needed domestic energy supply. Applying restrictions to a fraction of vessels in the area based on limited data to justify it raises questions about whether the restrictions offer any real benefit to the species. In over 85 years of operating in the Gulf, we are not aware of any Rice's whale strikes involving oil and gas vessels.
Chevron is committed to protecting marine life in the Gulf of Mexico and around the world. The unprecedented lapse in the offshore leasing program, the lack of clarity on future lease sales, and these vessel restrictions only serve to threaten Gulf Coast economies and America's energy independence and security."
U.S. Senator Joe Manchin (D-West Virginia), who was instrumental in adding energy security provisions to the IRA, also weighed in. "This Administration continues to kowtow to radical environmentalists at the expense of American energy security and costs to American families. Let me be clear, the exclusion of more than 6 million productive acres from the upcoming offshore oil and gas lease sale in the Gulf of Mexico based on a settlement reached in the name of protecting Rice's whale while conveniently only targeting oil and gas is yet another example of this Administration's intentional undermining of the strong energy security provisions in the Inflation Reduction Act."
And Dan Kish, senior fellow for the Institute for Energy Research, called Biden's offshore leasing track record the "worst since World War II ended," adding, "Everybody knows his record on whales is atrocious, as he continues to push offshore wind as the whales wash up on the beaches of the East Coast. Using whales as an excuse to limit leasing in the Gulf of Mexico is rightly being challenged."
The judge likely to hear the case, Terry Doughty, was appointed to his post in 2017 by then-president Donald Trump.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
